Under Section 204 of the Companies Act, 2013, your secretarial audit report — Form MR-3 — sits inside your Board's report, in public, where investors, lenders and the Registrar all read it. We conduct MR-3 audits the way they should be done: early, on evidence, and with every qualification worded fairly. No surprises in March. No copy-paste reports.
A secretarial audit is an independent check of whether your company actually followed the laws that govern it — not whether the numbers add up. That second job belongs to your statutory auditor. Ours is the first one: the Companies Act, 2013, the listing regulations, the insider-trading and takeover codes where they apply, FEMA where foreign money is involved, the secretarial standards on meetings and board processes, and the other laws that apply to your business. A company secretary in practice — and only a company secretary in practice — can conduct it and sign the report.
The report is given in Form MR-3 and is annexed to the Board's report under Section 134. That placement matters. MR-3 is not a certificate filed in a drawer; it is a public statement, read by shareholders, bankers, diligence teams and the Registrar. If the auditor qualifies the report, Section 204(3) requires your Board to explain that qualification in its own report. A clean MR-3 earned on good records is a trust asset. A qualified one, explained honestly, is manageable. A qualified one that surprises the Board in March is a governance failure — and it is the kind we are hired to prevent.
Section 204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 fixes who must have this audit. Every listed company. Every public company with paid-up share capital of ₹50 crore or more, or turnover of ₹250 crore or more. And every company — public or private — with outstanding loans or borrowings from banks or public financial institutions of ₹100 crore or more. The figures are taken as on the last date of the latest audited financial statements, and meeting any one test is enough. The borrowings test catches more private companies than their boards expect.
One distinction saves real confusion every year. The MR-3 audit under the Companies Act is not the annual secretarial compliance report under Regulation 24A of SEBI's LODR Regulations. The Reg 24A report is an exchange filing, due within 60 days of the financial year's end, and it has its own page on this site — Annual Secretarial Compliance Report (Reg 24A). Listed companies generally need both. If you are unsure which report your company owes, that is the first thing we settle.
You are a listed company — every listed company needs an MR-3 audit, whatever its size. (SME-listed companies are exempt from Reg 24A, but Section 204 still applies.)
You are a public company at or past ₹50 crore paid-up capital or ₹250 crore turnover on your last audited financials — one test is enough.
Your company — including a private company — carries ₹100 crore or more of loans or borrowings from banks or public financial institutions.
You are an unlisted material subsidiary of a listed company: Regulation 24A pulls you into secretarial audit through your parent.
A lender, investor or diligence team has asked for past MR-3 reports — and you are not sure what this year's will say.
Your Board wants an honest pre-audit health check in the third quarter, while there is still time to set records right.
We test your company against every limb of Section 204 and Rule 9 — and against Regulation 24A — and give you a short written opinion on which reports you owe and why. Boards file this; it ends the annual 'do we even need one?' debate.
Notices, agenda papers, minutes, attendance, dissent recording, committee workings, statutory registers — checked against the Act and the secretarial standards, meeting by meeting, not on a sample that flatters.
Every ROC filing, charge creation and satisfaction, share issue and transfer, director appointment and resignation — traced from board approval to filed form to challan, with gaps listed plainly.
For listed companies: LODR filings, PIT disclosures and structured digital database, takeover-code disclosures, shareholding patterns — checked against exchange records, not just your own files.
You see the draft observations early, with the evidence behind each one. Qualifications are worded precisely — what happened, which provision, what it means — and we help the Board draft its Section 204(3) explanation where one is needed.
Every observation lands in a dated fix-list: owner, action, deadline. The point of this year's audit is that next year's is shorter. Companies that run the calendar find the audit becomes a verification, not an excavation.
Fieldwork typically runs three to six weeks, depending on the state of your records and the number of subsidiaries. For a 31 March year-end, the sensible start is January–February; a third-quarter health check is better still. The signed MR-3 must be ready before the Board adopts its report — we plan backwards from your Board meeting date, in writing.
Fees follow size, subsidiaries and the condition of your records. As published in our own guide for boards, a mid-cap listed company typically pays ₹3–8 lakh; large groups pay more, and a single unlisted public company with clean records pays less. Every engagement is quoted as a fixed fee after a first look at your compliance calendar — no hourly meters, no surprises after the report is signed.
The checking behind an honest MR-3 takes weeks. Companies that appoint their auditor in March get a rushed audit, a heavily qualified report, or both. The observations do not become kinder for being found late — they just become unfixable before the Board's report is adopted.
A deviation the auditor finds and reports, with your response recorded, is a compliance event. The same deviation discovered later by the exchange or the Registrar is an integrity event. Show us the messy file in week one; it is cheaper there than anywhere else.
For listed entities, the secretarial auditor must now be a peer-reviewed company secretary in practice under the amended Regulation 24A framework. Appointing a non-peer-reviewed auditor can make the appointment itself defective — check the peer review certificate before the board resolution, not after.
Where MR-3 carries a qualification, Section 204(3) makes the Board explain it in its own report. 'Necessary steps are being taken' explains nothing and reads badly to every investor who sees it. Boards that state what happened and what has been fixed close the matter; vague ones invite questions.
Your Board appoints the secretarial auditor by resolution. We confirm applicability, fix the scope — entities, laws, period — and issue the document list the same week. For listed companies we verify peer-review status up front.
You give us the minute books, registers, filings and exchange submissions. We test on evidence: filed forms against approvals, disclosures against event dates, minutes against the standards. Queries go to your CS team in batches, not drips.
Before anything is final, you get the draft observations with the provision and the paper trail for each. Factual errors get corrected; management responses are recorded where the Board's report needs them.
The final Form MR-3 is signed and handed over in time for the Board meeting that adopts the Board's report — annexed to it, with the Board's explanations settled. Then the remediation calendar starts, so next year opens clean.
Every listed company; every public company with paid-up share capital of ₹50 crore or more or turnover of ₹250 crore or more; and every company — including a private company — with outstanding loans or borrowings from banks or public financial institutions of ₹100 crore or more. The tests are applied on the figures in the latest audited financial statements, and any one test is enough.
Yes, through the borrowings test. The paid-up capital and turnover limbs are written for public companies, but the third limb — ₹100 crore or more of outstanding loans or borrowings from banks or public financial institutions — applies to every company. A private company with large bank debt can owe an MR-3 audit even though its board has never heard of one.
MR-3 is the prescribed format of the secretarial audit report under Rule 9. It records the laws examined, the records verified, and the auditor's observations, qualifications or adverse remarks for the year. It is annexed to the Board's report under Section 134 and forms part of the annual report — which is why its wording matters so much.
Only a company secretary in practice — a member of the Institute of Company Secretaries of India holding a valid certificate of practice. For listed entities, the auditor must additionally be peer-reviewed under the amended Regulation 24A framework in force from 1 April 2025. Your in-house company secretary cannot audit their own work; independence is the point of the exercise.
MR-3 is a Companies Act audit report, signed after the year ends and annexed to the Board's report. The Regulation 24A annual secretarial compliance report is a SEBI LODR filing made to the stock exchanges within 60 days of the financial year's end, certifying compliance with SEBI regulations and circulars. Different law, different reader, different deadline. Most listed companies need both — our Reg 24A page covers the second report.
Yes, under the Companies Act. Regulation 15 of the LODR Regulations exempts SME-listed entities from Regulation 24A, but Section 204 has no such carve-out — a company listed on BSE SME or NSE Emerge is still a listed company for the Act, and still needs its MR-3 annexed to the Board's report. This is the single most common applicability mistake we correct.
Board and general meeting processes, statutory registers, ROC filings and charges, share capital changes, director appointments and resignations, related-party approvals — and, for listed companies, LODR, PIT and takeover-code compliance — plus FEMA where foreign investment is involved and the industry-specific laws that apply to the company. The auditor reports on compliance and on whether board processes are adequate and commensurate with the company's size.
The qualification goes into the annual report with your Board's explanation under Section 204(3). In practice, a specific, honestly explained qualification with a completed fix does far less damage than boards fear — investors and lenders see them regularly. What damages trust is a vague explanation, a repeat qualification the next year, or a qualification the Board plainly did not know was coming.
Section 204(4) sets a penalty of ₹2 lakh on the company, and ₹2 lakh on every officer in default — and the company secretary in practice can also be penalised for non-compliance with the section. For listed companies, exchange and SEBI consequences for the connected filing failures come on top. The fee for the audit is a fraction of the exposure.
Early in the year the audit covers — the appointment is by board resolution, and the auditor's interim observations are most useful in the third quarter, when a missed filing or a defective process can still be set right within the same year. Appointing in March leaves the auditor only one honest option: report what the year actually contained.
No — and you should be suspicious of any firm that offers both for the same period. The secretarial auditor must be independent of the compliance work being audited. Where KMA's practice handles a company's secretarial retainer, we say so plainly and the MR-3 must go to another practising company secretary. Where we are independent, we are glad to audit.
Three to six weeks of fieldwork for a single entity with orderly records; longer for groups with subsidiaries in several states or a year of patchy filings. The honest variable is your records, not our speed — which is why the engagement letter fixes the timeline after the document list is answered, not before.
Minute books and attendance registers for board, committee and general meetings; statutory registers; all ROC forms with challans for the year; charge documents; share transfer and allotment records; the related-party register and approvals; and, if listed, exchange filings, PIT disclosures and the structured digital database. We issue a precise list at appointment — gathering it is itself a useful health check.
A secretarial auditor who has reason to believe a fraud is being or has been committed against the company by its officers or employees must report it under the framework that applies to auditors — first to the Board or audit committee, and onward to the Central Government where the law requires. This is one more reason the audit must sit with an independent practitioner, not a friendly one.
Yes, and larger private companies do it before fundraises, acquisitions and listing plans — because a diligence team will effectively perform one anyway, on a deadline, with the price chip in their hand. A voluntary audit on your own timetable finds the same issues while they are still cheap to fix. The report simply is not annexed under Section 204 unless the section applies.
For a mid-cap listed company, typically ₹3–8 lakh, as we publish in our guide for boards. Groups with material subsidiaries pay more; a single unlisted public company with clean records pays less. We quote a fixed fee after reviewing your compliance calendar and last year's report — the quote does not move because the audit found more work than either of us hoped.
Usually, yes — if the qualifications were process failures (late filings, defective minutes, missed approvals) rather than continuing defaults. The route is boring and it works: close each observation with evidence, run the remediation calendar through the year, and let us verify in the third quarter instead of the fourth. Repeat qualifications are what readers punish; a clean year after a qualified one reads as a board that fixed things.
Under Regulation 24A, every listed entity and its material unlisted subsidiaries incorporated in India must undertake secretarial audit — the subsidiary's report is annexed to the listed parent's annual report. Materiality is tested on income or net worth against the consolidated figures. Groups often appoint one auditor across the parent and subsidiaries so the group picture is consistent; we handle that scoping in the applicability opinion.
Talk to a partner about your situation — no pitch, no obligation. If we're not the right firm for it, we'll tell you that too.
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